Re: this is something that I have been thinking about since Harvey......say a mid...From the sentiment I have seen and gathered from people in that same situation is they all mostly plan to rebuild. Some, dont even know how due to lack of money. FEMA does do loans to homeowners in that situation that lacked insurance. I have seen MANY stubbornly rebuild. 2 years IN A ROW! And those same homeowners now faced with rebuilding a third time due to Harvey. We have had significant floods in Houston in 2015 "Memorial day floods", 2016 "Tax day floods" and now HARVEY. Many that flooded for a third time will be seeking a FEMA "buyout" but will get far less than market or appraised value. I think most people in Houston are just too stubborn. They keep repeating the same mistakes. If I EVER lived in a house that flooded I would BE GONE ASAP and sell to minimize whatever loss I faced but I wouldn't repeat such a traumatic event. But, You just described what most of the Harvey victims here are facing. No flood Insurance and soon to be upside down on their mortgage. And too add insult to injury the way Federal flood insurance works for those with mortgages is the money first goes to their mortgage company and only AFTER the homeowner has paid and made repairs then the money is transferred to the homeowner for reimbursement. It can be broken up into smaller amounts for those that cant afford to do the repairs all at once but still, it takes liquidity to make repairs even with flood insurance. Only those without a mortgage get the money sent directly to the homeowner.
this is something that I have been thinking about since Harvey......say a middle class home buyer lives in a house that was worth $650,000 before the storm .......say that he had $250,000 equity in it before the storm ..iow he still owes $400,000....say that he is uninsured and it takes $200,000 to rehab it ...and after the rehab it is worth $500,000 because it is now damaged goods and in a known flood zone ...say he is a retiree....would this become jingle mail instead of the owner rebuilding ??? and if he did decide to rebuild would the bank lend him money to do so........ and if the current owner walks would the bank after taking a bath loan another person a loan to purchase the property and possibly repeat the same thing in 5 or 10 years??